Startup of the Day: Lithuanian Micapass, a regulatory technology startup

Founded by Gintarė Košubienė and Justas Rožėnas, Micapass is a Vilnius-based regulatory technology startup that develops a crypto compliance tool to prevent criminals. In October this year, it secured a €240,000 investment from SUPER HOW? and FIRSTPICK. The Micapass’ solutions enable the identification of bad actors, help to prevent potential sanctions, and ensure regulatory compliance.

In the Startup of the Day column, Gintarė Košubienė and Justas Rožėnas, co-founders of Micapass, share more details about the startup’s idea, its product, and plans.

The Startup of the Day column on AIN.Capital is dedicated to tech projects from all sectors that originated from the CEE countries. If you would like to introduce your project, please fill in the questionnaire.

Tell us about your startup. How does it work?

Micapass is an on-chain AML compliance tool for the evolving DeFi ecosystem. It provides an AML wallet screening and continuous KYC/AML monitoring designed for DeFi protocols, enabling the identification of bad actors, helping to prevent potential sanctions, and ensuring regulatory compliance.

How did you come up with the startup’s idea? What was the reason/motivation behind it?

In the exhilarating heyday of crypto, our team embarked on crafting a revolutionary privacy mixer for institutional investors. Just two weeks before our mainnet launch, our rival, TornadoCash, faced regulatory sanctions, throwing our plans into disarray. Instead of surrendering, we took it as an exhilarating challenge.

Over the following six months, we delved deep into research, driven by a singular mission: to create a solution that balanced privacy, compliance, and decentralization. The result was Micapass, a true testament to our tenacity and creativity.

“Micapass didn’t just break barriers; it redefined the real-time regtech landscape, proving that builders thrive on adversity, and obstacles are but stepping stones to groundbreaking innovations.”

the founding team added.

How long did it take to reach the prototype or MVP? What did you encounter?

We spent 6 months on it. The biggest challenge was to keep everything on-chain, keep anonymity, but offer compliance.

When exactly did you launch your product? Or when the launch is planned?

MVP was launched in August 2023. Now, it’s a fully working product with improvements made every week.

“We have developed a compliance tool that helps prevent illicit funds from entering protocols while keeping the decentralized spirit intact.”

the team of Micapass commented on its solution.

Tell us about the startup’s business model. How do you monetize your product?

Micapass has a B2B2C model. The user pays for digital identity. In the digital identity, the user saves proof of compliance — the user then can “travel” with these proofs from protocol to protocol.

What are your target markets and consumers?

Our primary focus is the DeFi market.

If the startup has already launched the product, what are the results: metrics, income, or any clear indicators that can be evaluated?

We have over 10,000 users on testnets and mainnets.

What about your team? How many people are working in the startup? If you’re looking for new employees, indicate whom exactly.

Our team consists of 6 people. At the moment, we are not hiring.

Have you already raised any investments? Provide us with more details on each funding round: the amount, investors, and the purpose of the investment.

Yes. Just recently, we raised €240,000. Currently, we are preparing for pre-seed and plan to raise €1.2 million.

What’s next? Tell us about your future plans.

Our vision: Micapass – the leader and #1st choice for DeFi protocols seeking AML compliance. We plan to onboard as many users as possible and integrate the product into various DeFi protocols.